Silicon Valley Venture Capitalists Still Shy Away From Cannabis

Some venture capitalists in Silicon Valley are still hesitant to invest in the cannabis industry, and at least one well-known investor blamed the industry’s current image for the lack of participation.

Lisa Suennen, an influential investor in San Francisco and managing partner of Venture Valkyrie Consulting, said some tech investors aren’t sure if “there are good entrepreneurs in the space, as opposed to grown-up stoners.”

“It’s one thing when the CEO shows up in an ironic hipster T-shirt,” Suennen said. “Quite another when that is their actual wardrobe.”

Perhaps the most famous snub by Silicon Valley came in 2010, when Weedmaps co-founder Justin Hartfield pitched billionaire Tim Draper, who initially seemed interested. Draper eventually bowed out, telling Hartfield, “I am going to chicken out.”

But other tech investors are starting to come around. Zynga co-founder Tom Bollich is now CEO of Surna, a Colorado-based cannabis fund. According to Troy Dayton of the ArcView Group, Adam Wiggins, who co-founded San Francisco cloud company Heroku, is “looking closely” at cannabis.

5 comments on “Silicon Valley Venture Capitalists Still Shy Away From Cannabis
  1. Troy Dayton on

    There are signs of great recent progress on this front. I was a guest on investor Jason Calacanis’ show This Week In Start-ups a few weeks ago. This is the show where all the top tech investors and entrepreneurs are guests. Also, Wired Magazine did a huge story on the intersection of tech and cannabis a few weeks ago. Also, Brendan Kennedy from Privateer came to the industry from Silicon Valley Bank and they’ve raised more than 50 million — I’m sure much of that is from Silicon Valley VC’s. Also, ArcView has a number of SV tech investors who are members but who are not open to media attention. I think that Silicon Valley money is just about to start to really hit the cannabis industry.

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  2. Shane Doull on

    I agree with Troy. By August U.S. WEED CHANNEL will start raising capital for our planned endeavors…and these investment funds are tapping their feet with anticipation. This will be a fantastic year for USWC investors as well as those savvy enough to find a way to participate in sponsorship or advertising.

    On a seperate note:
    I do not appreciate Lisa Suennen’ name calling. When she speaks of business managers labeling the bad ones as ‘Grow-up Stoners’.
    Calling someone a ‘Stoner’ carries quite a negative connotation. Please refer to these people as bad business managers like you would if they were in any other industry that was not Cannabis related. In my experience I found name-calling has never made anyone seem like a great person. Just looking out for you Lisa. 😉

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  3. John Barton on

    The main reason more investors from SV haven’t invested is because there has been a shortage of real deals with reasonable valuations. That’s about to change as more solid companies are getting ready to announce and begin serious capital raising efforts. This industry will attract hundreds of millions of dollars in fresh capital from SV and other serious sources over the coming year-both debt and equity. The upside is just too compelling.

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  4. Rick on

    As someone who came from the high-tech industry and is now very much involved in this business, I would wholeheartedly agree with Lisa’s assessment. The folks involved in this business from pretty much every angle with very few exceptions are nothing more than glorified dopers. It’s very apparent in dealing with them, they never were involved in any business whatsoever before jumping into this world. Eventually of course as the business matures, these novices will be weeded out but it’s going to take time.

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